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7th Pay Commission: Ashok Lavasa committee on allowances submits report to Arun Jaitley

7th Pay Commission: Ashok Lavasa committee on allowances submits report to Arun Jaitley

The pay commission had recommended abolition of or subsuming of allowances like acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing.

The Ashok Lavasa Committee on Allowances submitted its report to Finance Minister Arun Jaitley on April 27. The Committee was formed to review the recommendations of the Seventh Pay Commission. 

The pay commission had recommended abolition of or subsuming of allowances like acting, assisting cashier, cycle, condiment, flying squad, haircutting, rajbhasha, rajdhani, robe, shoe, shorthand, soap, spectacle, uniform, vigilance and washing.

The report will now be examined by the empowered committee of secretaries and following that it will be placed before the Cabinet.

The Committee was constituted in June last year after the government implemented the recommendations of the Pay Commission.

However, if the  government implements pay commission recommendations on allowances, then as per estimates the cost to the exchequer will be Rs 29,300 crore.

Here's a background to the Seventh Pay Commission story:

The Seventh Pay Commission had recommended abolishing 53 of the 196 allowances, and subsuming 36 other allowances. It also recommended slashing the House Rent Allowance (HRA)--for metros, commission recommended bringing down the HRA from 30 per cent to 24 per cent.

The Seventh  Pay Commission had recommended the rate of House Rent Allowance (HRA) be kept at 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.

Government employees protested the recommendations of the Seventh Pay Commission, following which the Narendra Modi government formed a committee under Finance Secretary Ashok Lavasa to review the suggestions.

The Committee on Allowances was constituted in July and after an extended deadline was asked to submit its report to the government by February 22, 2017.

That the Ashok Lavasa-led committee had missed its deadline was revealed by Minister of State for Finance Arjun Ram Meghwal while replying to a question on Seventh Pay Commission in Parliament.

It was reported that the Committee on Allowances could not submit its report as it had sought comments from various ministries on 14 allowances.
Speculations are rife that the Committee on Allowances is likely to recommend against reducing HRA. Although, a few reports had suggested that the committee is unlikely to vote for a hike in transport allowance.